The Waikato Times. SATURDAY, JULY 14, 1945 TAXATION AND EMPLOYMENT

Waikato Times, Volume 106, Issue 22661, 14 July 1945, Page 4

The Waikato Times. SATURDAY, JULY 14, 1945 TAXATION AND EMPLOYMENT

One of the important domestic questions for consideration by the new Australian Prime Minister, Mr J. B. Chifley, is whether the Government can assist reconstruction and rehabilitation by giving relief in taxation. The question has come to the front because of Mr Chifley’s announcement that Federal expenditure in the past year was £45,000,000 less than the Budget estimate while revenue was £18,000,000 greater than the estimate. Therefore the Commonwealth has a surplus of £63,000,000 above what it expected to have when the Estimates were framed last year. Mr-A. W. Fadden, leader of the Country Party, and other commentators have drawn attention to what they describe as tire futility of contemplating elaborate postwar plans and full employment while a crushing burden of taxation remains. Since it is industry that will have to provide an overwhelming proportion of the total employment the responsibility is upon the State to see that industry is placed in a position to do what is expected of it.

New Zealand’s problems closely resemble those of Australia. One difference, however, is that New Zealand is apparently paying a greater percentage of the cost of the war from revenue than Australia. In both countries domestic expenditure from taxation, notably on social services, has increased enormously, so that a return to anything like the basis of pre-war taxation is extremely improbable. Only emergency expenditure of huge sums of borrowed money has made possible the collection of unprecedented taxation revenue. When this expenditure falls away, with a consequent reduction in public purchasing power, industry must be relieved of much of the present burden. In reply to the suggestion that public expenditure can be maintained at the present rate it is only necessary to refer to the growth of the national debt. In New Zealand’s case the overseas debt has not been heavily increased during the war but the internal debt has expanded to a staggering figure. The immediate concern in Australia, as in New Zealand, however, is the ability of industry to comply with the policy of full employment. Taxation relief is being sought as soon as the war situation allows so that industries can expand their operations to employ not only the thousands of men who are returning from the fighting fronts but also the large number who will have to be transferred from war factories and services to peacetime employment. Industries will require not only a great expansion in plant but a large increase in supplies of raw materials. Heavy 4 taxation and war conditions generally have meant a general shrinkage in the operations of thousands of industrial concerns. They cannot satisfactorily meet the coming demands unless they are permitted to use a greater portion of their revenue. The most beneficial taxation relief will be that which is aimed at allowing the expansion of industrial activity, thus opening the way for the absorption of the country’s manpower in useful employment.